CAIRO Egypt and Ethiopia have agreed to set up a technical team to review the impact of a $4.8-billion Nile river dam which Addis Ababa announced in March, Ethiopian Prime Minister Meles Zenawi said in Cairo on Saturday.
Egypt has been worried over changes to colonial-era treaties since Nile basin nations, including Ethiopia, signed a deal last year that strips Cairo of the right to the lion's share of the river's waters and effectively removes its veto power over dam projects.
Egypt, witnessing a growing population and rising temperatures, is almost entirely dependent on the Nile for its water and has been nervously watching hydropower dam projects take shape in upriver nations.
"We have agreed to quickly establish a tripartite team of technical experts to review the impact of the dam that is being built in Ethiopia," Zenawi told a news conference with Egyptian Prime Minister Essam Sharaf. Experts from Sudan will also be part of the team.
"We have agreed to continue to work on the basis of a win-win solution for all countries in the Nile basin," he added.
Relations between Egypt and Ethiopia plunged after the treaty was signed last year by six of the nine countries through which the Nile runs. Ties began to thaw after President Hosni Mubarak was overthrown in a popular uprising in February.
Ethiopia in May agreed to delay ratification of the treaty until a new Egyptian government has been elected.
Sharaf said Cairo and Addis Ababa were discussing a "comprehensive development plan" for the two countries.
"We can make the issue of the Grand Renaissance Dam something useful," he said. "This dam, in conjunction with the other dams, can be a path for development and construction between Ethiopia, Sudan and Egypt."
Sharaf said Egyptian investment in Ethiopia stands at $2 billion and bilateral trade stands at $300 million a year.
An Egyptian team of 48 politicians and activists visited Addis Ababa last May to try to push for a compromise.
Egyptians are expected to elect a new parliament in November and chose a new president soon after, though no exact date has been set for either poll.
Under a 1929 pact, Egypt is entitled to 55.5 billion cubic meters a year of the Nile's flow of around 84 billion cubic meters.
Apart from the Grand Renaissance Dam, Ethiopia has announced plans to construct two more dams along its share of the Nile as part of a plan to produce 20,000 megawatts (MW) of power within the next 10 years.
(Additional reporting by Omar Fahmy; editing by Elizabeth Piper)